The Green Economy: It May Not Include Me

This post was submitted for the United Nations World Environment Day blogging competition sponsored by the United Nations Environment Program (UNEP). Please “Like” it on Facebook or Tweet using the hashtag #WED2012.

The green economy may not include me. This might sound shocking because, not only do I contribute to a publication focused on green and sustainable business news, but I graduated from a school that focuses on sustainable management. With a cogent résumé towards a green economy, why might the green economy not include me?

I have two deep passions in my life. There is sustainability me and then there’s liberty me. By sustainability, I mean meeting the needs of the present without compromising the ability of future generations to meet their own needs. By liberty, I mean having the ability to do as one chooses, granted that one does not infringe on another persons liberty by the use of force.

Think of the green economy as the goal. This is the what. There is no problem here. However, the qualm I have with the green economy is not because of the what, but the process, the how. How do we move towards a green economy? The two polar methods of how to run an economy, green or not are: centralization or decentralization. One is inclusive of liberty minded folks, the other is not.

One scheme, a centralized (green) economy may sound tantalizing. This is where price and resource allocation is controlled by a central authority, i.e. national government. However, there is high taxation accompanied by high national subsidization, if not control, of the (green) industry. This alone leaves the liberty me out of the green economy. Taking money from one person, i.e. taxation, and giving it to a (green) industry, i.e. subsidization, violates the very essence of liberty.

The other strategy towards a (green) economy is decentralization. Decentralization allows price and resource allocation to be determined by the dynamic and emergent nature of marketplace. Utilizing this strategy would make me, and many who share a passion of liberty, receptive of the green economy, because our liberty is not infringed.

A third tactic exists, a mixed (green) economy. Some prices and resources are centrally controlled, yet others are left to the marketplace. Yes, we live in a mixed economy, but heading the direction of centralization. The more the green economy is centralized, the less will liberty minded individuals be amenable to a green economy.

You must think I am crazy for thinking that radical decentralization of the economy will work, let alone protect the commons. Since we are talking (green) economics, lets bring in the works of Nobel Laureates of Economics, Friedrich Hayek and Elinor Ostrom.

Hayek suggests central planning, green or otherwise, cannot and will not work because knowledge and information is dispersed amongst individuals in the marketplace. No central planning board can know how to allocate goods and services efficiently and effectively.

Through our emergent actions, this knowledge of resource allocation is transmitted via the marketplace, not from top down central planning. As the The Prize in Economic Science press release states, “[Hayek’s] conclusion is that only by far-reaching decentralization in a market system with competition and free price-fixing is it possible to make full use of knowledge and information.”

Ostrom reached a similar conclusion of decentralization regarding the commons: “Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized,” says The Prize press release. Governance of the commons is better done locally, not through centralization.

Through decentralization of the economy and the commons, not only will we be able to protect the environment, but we will also include liberty minded folks (like myself) in the green economy who would otherwise be marginalized.

Jonathan Mariano is an MBA candidate with the Presidio Graduate School in San Francisco, CA. His interests include the convergence between lean & green and pursuing free-market based sustainable solutions.